Chainlink News

Fractional-Algorithmic Synthetic Assets Introduced with Twindex 2.0

Crypto trends have been constantly changing, and the world is on tenterhooks to understand the convergence. This has led to the announcement of DeFi synthetic assets that have found a level ground with contributions pouring in from several corners. Twindex 2.0’s release aims to reflect the synthetic asset’s future and the excitement is palpable across the world. A newer trend in the market, synthetic assets, has been overrun by algorithms that are fractionalized. The mechanism on the block is even more advanced and has been developed for tracking real-time values of the market through assets.  

The problems plaguing communities for synthetic assets will finally be solved through chipping in collaterals while removing the premium and discounted price issues. A collateralized debt position will no longer be a risk while minting the new synthetic tokens. Users no longer need to worry about liquidation while minting and trading newer assets on the block, which will be at par with real-world assets. A fractional-algorithmic algorithm approach will be applied to the new synthetic assets of Twindex. 

The KUSD stablecoin will partially back the tokens, while the utility token TWX is also set to partially back the same. The ratio as combined is set to be similar to the likes of a collateral ratio for stablecoin that would give birth to dynamic tokens. KUSD has the value backing of the collateral and the reputation of being the most trusted medium. The KUSD stablecoin is set to maximize the efficiency of the stablecoin capital while reducing the burden of the much-needed collateral. Synthetic assets have a greater role play in the creation of value. The same is done without the assistance of assets that are fully backed. 

Earning profits to the tune of dividends in farming pools to building up capital gains amassed through assets sale and purchases is now a reality with the synthetic assets of Twindex, also termed as tAssets. There are multiple mechanisms in the process for pegging the tAssets at pricing similar to that of the real world.  


The creation of the Fractional-Algorithmic synthetic assets will see the inclusion of stablecoins and utility tokens for which the collateral ratio is a prerequisite. The ratio amongst TWX and KUSD sums up the collateral aspect for the synthetic assets of Twindex. A 100 percent ratio for collaterals indicates the user to achieve KUSD worth 100 percent while limiting TWX to a mere zero percent for minting tAssets. At the same time, an 80 percent ratio indicated the user to achieve KUSD worth 80 percent and TWX worth 20 percent for the creation of tAssets. 

From Minting to Redemptions

The TWX and KUSD token supplies see new tAssets being created through minting as per the collateral ratio. This states how minting mandates the asset valuation while the same is being minted is equal to the market price. The process of supplying tAssets for burning while retrieving KUSD and TWX is what redemption stands for.

Paul Jolin

Paul Jolin is an economist having experience in financial research. He joined CoinNewsSpan in 2017 and since then has been working with the team to offer best price analysis and review stories on the crypto space. He is optimistic about blockchain technology's use cases in terms of financial freedom. He also has experience as an independent trader.

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